i have had a neg amorization loan on my house now for about a year, i owe $6,000 more on my loan then when i first started it, but i have been able to put $6,000 in my savings accout. am i heading for disaster or am i doing the right thing, what are the goods and bads about this type on loan.
2007-01-02 09:35:44 · 3 answers · asked by FISHING BUDDIE 2 in Business & Finance ➔ Personal Finance
Neg-Am loans are bad news. You owe $6000 more than when you first started. That is a BIG red flag right there. You are not paying down your principal and what ever interest you don't pay every month is re-amortized into the loan amt. You will be in debt for the rest of your life. I would HIGHLY recommend refinancing to a fixed rate as soon as possible. Especially if you plan on staying in the home.
Neg-Am loans are good when you want to get into the home right away or you intend on selling the house in less the 5 years or so. Otherwise I don't see any other advantage to it. People usually use a Neg-Am loan to get into the home and refinance right away. I would suggest you refinance before you owe more than your home is worth.
2007-01-03 17:05:08 · answer #1 · answered by insertnamehere 2 · 0⤊ 0⤋
Prices are not going up on homes. A negative amortization is silly. You are earning less in your savings than you are paying for the loan.
2007-01-02 13:52:57 · answer #2 · answered by sm4125 3 · 0⤊ 0⤋
If your property goes up in value you're in the catbird's seat. Otherwise...ARRRRRGH! I'd consider refinancing with a conventional loan. Or selling if you can make a profit.
2007-01-02 11:02:24 · answer #3 · answered by Big R 6 · 0⤊ 0⤋